A Financial Feasibility Analysis on: 3D-Printing Solid State Lithium-Ion Batteries

The current Solid-State Electrolyte (SSE) used in Li-ion batteries are limited by their current production methods (i.e., die-pressing; tape casting), planar geometries and random porosities. This constrains their use for mass production in manufacturing plants. 3D-printing of SSEs, however, is a new, highly-researched method that shows promise in expanding beyond the laboratory to more large-scale industrial production as rapid prototyping takes place. Indeed, laboratory studies to date suggest that SSE technology is safer than current production methods and provides a safe high energy solid-state battery. For SSE technology to become a reality though, it must be scalable and financially feasible. Therefore, this thesis aids to bridge the gap between laboratory studies and commercialization by examining the financial feasibility of adopting this technology for a hypothetical battery manufacturing plant. In doing this, I develop a model of the incremental net cash flows, and subsequently the Net Present Value (NPV), from such an enterprise. If the present value of future cash flows from the enterprise are anticipated to be greater than the investment costs, the NPV is positive and the investment in this new technology would be considered instantaneously value enhancing and thus financially feasible. However, future cash flows are highly uncertain, which brings into question financial feasibility in a risky environment. To address the riskiness of future cash flows, I model three risk factors: the cost of raw materials, the potential growth in battery sales, as well as the potential mark-up (profit margin) of the SSE enterprise. Using Monte Carlo simulation (MCS) I model the incremental cash flows considering these risk factors and derive probabilistic assessments of NPV. My analysis suggests that despite the uncertainty caused by the volatility of raw metal prices, assumptions on price mark-up, and uncertain market demand for Li-ion batteries, there is a high probability of an investment in SSE batteries being financially feasible. Future research should consider the value of real options (optionality embedded in tangible investments) as traditional NPV analysis may underestimate the potential value of an investment in the presence of uncertain cash flows, especially if management has the ability to respond to the uncertainty.